Compensable Time | consulting

Do You Have to Pay for Every Minute of an Employee's Time? - The Issue of Compensatory Time

The Fair Labor Standards Act of 1938 (FLSA) requires that unless an employee is not specifically exempted from the provisions of the Act, the employee must be paid for all hours worked. In addition, the Act requires that the employee must be paid a minimum wage and that if the employee works more than 40 hours in a single workweek, the employee must be paid overtime pay for the additional hours.

Although the Act defines the term "employ" to mean "to suffer or permit to work," the Act contains no definition of the term "work." Subsequently, the U.S. Supreme Court endeavored to refine the meaning of the term "work", and as a result, Part 785 of the Code of Federal Regulations [29 CFR 785] clarifies the meaning of the term to a larger extent. But even today the courts continue to address this issue.

In this paper, we will endeavor to clarify what hours an employer must pay for and what hours are not compensable based on the Code of Federal Regulations. In addition, we will discuss how the courts have addressed some of these situations.

Unauthorized Work Time or Overtime

The CFR states that "work not requested but suffered or permitted is work time." [29 CFR 785.11] For instance, an employee may offer to work additional time in order to complete a task, or an employee may take work home in order to complete it before a deadline. The Code states that if "the employer knows or has reason to believe that he is continuing to work," then the time spent is working time.

The location of where the unauthorized work is performed is immaterial. However, employers may have written rules to prevent an employee from performing unauthorized work, so the time may not have to be compensated for if the employer consistently enforces its rules, possibly through disciplinary action. [29 CFR 785.13] Action to prevent the employee from performing the additional work must be taken by the employer, because if the employer fails to do so and it benefits from the work performed, then the time must be paid for.

In one court case a federal district court ruled that unauthorized work performed at home was not working time because the employee failed to record the overtime work on her timesheets, and she failed to inform her managers that she was working at home "off the clock." [Slattery v. HCA Wesley Rehabilitation Hospital, 83 F.Supp.2d 1224 (D Kan., 2000)]

Waiting Time

Under the FLSA it was not always clear whether or not waiting time was working time, so in 1944 the U.S. Supreme Court defined the terms "engaged to be waiting" and "waiting to be engaged."

If an employee is "engaged to be waiting," then the employee is on duty and must be paid for the time. Even if the employee is allowed to leave the workplace, the time must be paid for. "The periods during which these occur are unpredictable. They are usually of short duration. In either event the employee is unable to use the time effectively for his own purposes." [29 CFR 785.15] For instance, a factory worker may spend time in the break room while his machinery is being repaired, a secretary may play a game on a computer waiting for a letter to be proofread by her manager, or two fireman may play checkers waiting for an alarm.

On the other hand, an employee is "waiting to be engaged" if he is on-call and must remain on the business premises or remain close enough to the premises "that he cannot use the time effectively for his own purposes." [29 CFR 785.17] However, if the employee does not have to be on the business premises, but only has to be available if called, then the on-call time does not have to be paid for.

In general, if an employee is completely relieved from duty, and the time off is sufficient for the employee to "use the time effectively for his own purposes," then the employee is off duty and does not have to be compensated. However, the employee must be told in advance that he may leave the business premises and will not have to commence work "until a specified hour has arrived." [29 CFR 785.16]

Sleeping time is a special form of waiting time. Under certain circumstances an employee must be compensated for time spent sleeping. The most important key is whether or not the employee is required to be on duty for less than 24 hours or for more than 24 hours. [29 CFR 785.21-22]

Travel Time

In 1947 Congress passed the Portal-to-Portal Act, which was an amendment to the Fair Labor Standards Act. The Act primarily clarified that certain activities are generally not compensable working time under the FLSA. In particular, the Act excludes from mandatory compensation:

Time spent traveling to or from the actual place where the employee performs his principal activities. This is commonly referred to as commuting time.
Time spent on incidental activities before or after the employee's principal activities.

The issue of commuting time has been addressed in the courts. As recently as 2013, the Fifth Circuit Court of Appeals affirmed that an employee's time spent traveling to and from the workplace on a company bus was not work time, even though the bus trip was mandatory every day between the company's parking lot and the plant. [Griffin v. S&B Engineers & Constructors, Ltd, No. 12-40382, 2013 US App.] The U.S. Supreme Court later declined to hear the appeal, thus affirming the original decision.

Although commuting time is not compensable working time, certain forms of travel must be treated as working time, including the following:

Home to work travel in an emergency situation. [29 CFR 785.36] If the employee has already gone home after completing his day's work, and he is called out to perform emergency work, then the travel time is working time.
Travel from home for a one-day assignment in another location. [29 CFR 785.37] Instead of commuting to his normal work location, the employee travels directly to an assignment, performs the work, and travels home in the same day. An employer is allowed to have a policy to deduct the employee's normal commuting time and time spent for meals, but the rest of the travel time is working time.
Travel that is all in the day's work, as long as the travel to and from a job site is to and from either the employee's workplace or a place designated by the employer. [29 CFR 785.38] If the employee travels directly from home to his first work assignment, or travels directly home from his last assignment for the day, the commuting time is not working time.
Travel time away from the employee's home community is working time, but only the time spent traveling during normal working hours is compensable. [29 CFR 785.39] For instance, suppose the employee normally works from 9 am to 5 pm, but he flies to another city between 3 pm and 8 pm. Only the 2 hours between 3 pm and 5 pm is working time, and this would be true even if the travel is on a day the employee normally doesn't work, such as a Saturday or Sunday.
Time spent driving a personal vehicle for business travel is all working time. [29 CFR 785.40]

Activities Before and After Work

The second area of activities excluded by the Portal-to-Portal Act is time spent on incidental activities before or after the employee's principal activities. Certain types of incidental activities, however, must be included in an employee's work time. The key is whether or not the activity is "an integral part of the principal activity." [29 CFR 785.24(b)(1)]

For instance, an employee who operates a piece of machinery may be required to perform regular maintenance on the machinery before and/or after using the machinery. Such work is an integral part of operating the machinery, so it is compensable work time.

This is one area in which there have been numerous court decisions. For instance, in 2014 the U.S. Supreme Court ruled that the time spent by employees undergoing the anti-theft security screenings required of all Amazon warehouse workers at the end of each workday was not compensable work time. This was in spite of the fact that the activity amounted to roughly 25 minutes of each day and was required by the employer. [Integrity Staffing Solutions, Inc. v. Busk, No. 13-433 (U.S. Sup. Ct., 12-9-14)]

In another case before the Supreme Court, the Court unanimously rejected the argument that the donning of protective gear was not the same as changing clothes and employees should be compensated for the time spent doing so. [Sandifer v. United States Steel Corp., No. 12-417 (U.S. Sup. Ct., 1-27-14)]

Meetings and Training Sessions

In general, the Code of Federal Regulations [29 CFR 785.27] states the following:

"Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met:

(a) Attendance is outside of the employee's regular working hours;

(b) Attendance is in fact voluntary;

(d) The employee does not perform any productive work during such attendance."

The primary exception would be training that is directly related to the employee's job. If the training or meeting is designed to enable the employee to perform his job more effectively, then the time spent is working time. However, if the training is designed to train the employee for another job or learn a new skill, the time spent is not working time, even if the training course is paid for by the employer. [29 CFR 785.29]

There is also an exception in the overtime provisions of the FLSA for remedial education. If an employee has not graduated from high school or attained an eighth grade level of education, an employer may arrange for the employee to receive training to provide him with reading or basic skills. The employer may pay the employee straight time pay up to 10 hours over the 40-hour workweek without having to pay overtime. [29 CFR 778.603]

Use of Time Clocks

Where time clocks are used, employers may not have to pay for all time recorded on the time clock if either of the following conditions apply:

The employee voluntarily comes in before his regular starting time, or remains after his regular ending time, and the employee does not perform work during those times. In that case, the recorded time is not included in the employee's working time. [29 CFR 785.48(a)]
The employer has established a policy of rounding recorded time to the nearest 5 minutes, tenth of an hour, or quarter of an hour. The assumption is that over time the employee's time clock punches will be rounded both up and down, so on average the employee will be paid for all time worked. [29 CFR 785.48(b)]

Conclusion

As seen from the foregoing discussion, whether or not to compensate an employee for the time spent on activities that may appear to be related to his work may not always be straightforward. However, the Fair Labor Standards Act and the Code of Federal Regulations do specify what time is compensable and what activities can be excluded from working time. So in most cases employers can rely on the existing regulations when making decisions regarding employee compensation.